A new report says that an African lumber company owned by major financiers of the Hezbollah terror group has circumvented sanctions and managed to export millions of dollars worth of timber to U.S. companies.
The investigation by Global Witness, a D.C.-based group that aims to uncover global corruption, focused on an African-based company called Congo Futur, which was targeted by sanctions from the U.S. Treasury Department because the Tajideen family, which gives millions of dollars to Hezbollah, owns it.
Now, by creating new companies and transferring ownership to proxies, the Tajideen family has managed to circumvent sanctions and export more than $5.5 million worth of luxury timber from Congo to the United States since sanctions were implemented in 2010, according to the Global Witness report.
The Tajideens managed to circumvent sanctions by using the large network of companies that it owns.
It was revealed following the sanctions that one company owned by the Tajideens, Trans-M, was in possession of lucrative forestry contracts from Congo that are valued at hundreds of millions of dollars.
Following the imposition of sanctions against the Tajideens, however, Trans-M changed its name to Cotrefor, transferred shares to new owners, and began to deny that they were the same company.
Global Witness obtained documents showing that operations remained identical following the same change—Cotrefor is still located in the same office in a building owned by Congo Futur, it still uses a shipping company owned by Congo Futur, and it took over all the logging contracts that were originally awarded to Trans-M.
Furthermore, documents show that the Tajideen shares were transferred to a man living in their home village in southern Lebanon. Business associates of Tajideen retained their shares in the company.
Cotrefor, in possession of contracts for some of the most valuable tropical timber on the globe, ships widely to the United States, Europe, and Asia. Global Witness estimates that in 2013 its global exports exceeded $58 million.
The report lists a handful of American companies, each of which has received tens of thousands of kilograms worth of lumber from Cotrefor since sanctions were implemented.
Global Witness writes in its report that all of the companies, perhaps unknowingly, are operating in violation of U.S. sanctions.
"The continuing trade in valuable Congolese timber between Cotrefor and the U.S. suggests that many timber traders are not looking into who owns their suppliers," writes the report.
Companies should "undertake thorough due diligence, as required by law, to ensure they do not risk sourcing timber or derived products from logging companies allegedly linked to terrorist financing," it says.
The report also calls on the U.S. Treasury to issue guidance on whether doing business with Cotrefor constitutes a breach of current sanctions.
The Treasury described Congo Futur as a "cover company" that operates in the "food and diamond trades for Hezbollah." The company, along with three of the Tajideen brothers, was designated as a Specially Designated Global Terrorist.
The department has said that the Tajideens funnel tens of millions of dollars to Hezbollah through their network of real estate, diamond export, supermarket, and food processing businesses in Central Africa.
The Tajideen family has operated real estate, diamond export, supermarket, and food processing businesses across Angola, Gambia, Sierra Leone, and Congo for many years, the U.S. Treasury says.